Types of Accounts

The business transactions can be grouped   under three types of accounts :

  • Personal accounts
  • Real accounts
  • Nominal accounts

Personal Accounts

Personal accounts are the accounts of persons or firms that the business deals with. These are primarily of three types :

  • Natural person’s account : These are accounts of real persons who  transact with the business in various capacities. The proprietor’s account and the accounts of customers are some examples of natural person’s accounts
  • Artificial person’s accounts : These are accounts of firms and entities that transact with the business. The accounts of a limited companies or banks that are not real persons are the examples of artificial person’s accounts.
  • Representative personal account : These are accounts that represent certain person or persons. If a business has not paid the rent of a number of shops for the past two months then all landlords are creditors of the business and the amount due to them is recorded under a common head called Rent Outstanding Account. This is a representative personal account. Other examples of representative personal accounts are Interest Outstanding and Interest Paid in Advance accounts.

Real Accounts

Real accounts are the accounts of the properties, assets and possessions of a business. These can be of two types :

Tangible Real accounts: These are accounts of things that can be touched, measured, sold or purchase. Examples of tangible real accounts are land account, furniture account and cash account.

Intangible Real accounts: These are accounts of things that cannot be touched in the physical sense but can be measured in terms of money value. Trademark or patent rights are examples of  intangible real accounts.

Nominal Accounts

Nominal accounts  are the accounts of each head of expense or income of a business. They are used to define the nature of the transactions; hence, they are also called fictitious accounts. Without nominal accounts, it is very difficult for the management to find out where the money was spent. As these accounts are used to define the nature of the transaction they are nominal accounts.

Certain rules have to be followed for the different accounts to decide which account has to be debited and which has to be credited. It is also important to understand whether the transaction has to be posted n the debit side or the credit side of an account.

36 thoughts on “Types of Accounts

  1. it was very good

  2. very well explained..

  3. nice………

  4. I KINDA like ur notes…..

  5. ye to sab jegeh de rekha hai koi example bi to de do…………..

  6. mukut bihari sharma says:

    the language design is easily understandable according to student demand.

  7. mukut bihari sharma(std.leader rrc,alwar says:

    very easy language

  8. Justine mutai says:

    Nice notes

  9. plz may you explain again the persons account including their types…

  10. plz may you explain again the persons account including their types… thanks

  11. why the accounts named personal real and nominal

  12. Accounts rouls

  13. good learning skills is their

  14. It’s good supporting material for study.

  15. beautiful explains yar

  16. well said,can u give sum examples for nominal A/C.

  17. Monika Verma says:

    very easy language

  18. thanks for this kind of information

  19. Very well explained. Easy and understandable to even a non-commerce person. Thanx!!

  20. i like the way very much

  21. it is understandable but give more information about accounting.


  23. well explained! But some accounts like liabilities, capital are from which account type?

  24. it is very easy to understand thanks

  25. ektarfaa he yar maa kasam khus kar dis

  26. Good and valuable write thanks



  28. important account line

  29. Good Explained ……………….

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